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non payers

Discussion in 'Business Fundamentals' started by glenspot, Dec 15, 2004.

  1. glenspot

    glenspot Senior Member
    Messages: 255

    How long do you go before you deal with a non-payer?

    I'm not at the point YET that I need to be freaked out, but what do you do?

    I included the line "payment is due upon receipt. a late fee will be assessed to all overdue payments" in the contracts and on the invoice.

    Any idea how much you can charge for a late payment? If I'm late paying at my storage shed, they charge me $10 late fee for the month. Is there some sort of formula that you are supposed to use?

    Also....do you cut them off from plowing? Or keep going...adding to their bill?. (and adding to the late fee) It would seem that if they don't pay they are in breach of contract and you could take them to small claims court. HOWEVER.. Is it worth it if they only owe you $100 or so. If you stop plowing for them, they can go and hire another plower and not pay him either, then another, and another...

    If I hold up my end of the bargain, and plow every 4" as the contract states, bill monthly, as the contract states, and do everything the contract states...Then, if they haven't paid by the end of the season. THEN take them to Small Claims.. when there is a decent amount of money to go after. THEN i can get a lien on property, or whatever.

    If I try to chase them down for $100...in the end I will get no money (after expenses) and need to try to get another customer for the winter.

    Glen
     
  2. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    First things first. If payment is due "on receipt" and "a late fee will be assessed to all overdue payments", that means you assess a late fee starting the day after they get the bill?

    I answered the other questions in another post. Basically, I don't plow if it's over 10 days past due. I don't have a "late fee". I'm not in the loan-sharking business.
     
  3. Plow Meister

    Plow Meister PlowSite.com Addict
    Messages: 1,174

    Also, by telling them that a late fee will be assessed gives them the "right" to be late. The most you can charge is I htink 24% anually or 2% monthly. The going rate is 1 1/2% monthly. You can also charge a late payment fee of up to $30.00 depending on the state you are in. Check with the states attorney for that info.

    As far as suspending the plowing... You will have to state that in your contract or you can send them another bill with that info on it.

    I would first call teh customer and see what's up. They may have lost the bill or forgot to pay it. You never know.

    All else fails... Push a big pile of snow in front of their doorway :D
     
  4. glenspot

    glenspot Senior Member
    Messages: 255

    No, but it doesn't offer a "grace period" or anything. If payment doesn't come in by the time the next months bils go out I will add a late payment penalty on the next bill. If payment comes in before the next billing cycle...then we're ok.
     
  5. glenspot

    glenspot Senior Member
    Messages: 255

    Thats what my friend in the banking industry said to do....

    But then they have to bring in a front end loader, and when I do sue them in Small Claims they counter sue for THEIR expenses and loss of income, etc etc and I end up paying them.
     
  6. Plow Meister

    Plow Meister PlowSite.com Addict
    Messages: 1,174

    I guess I should cover my ars by saying I wouldn't really suggest piling snow in front of their dor. Just an idea to smile at :D
     
  7. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Then there is no "due date". I'd say since it doesn't state a date payment is due by, then you haven't any claim. They can pay whenever they want.

    On edit: While it may state "due on receipt", there is no provision for what happens if it's not paid "on receipt". Kind of like a utility bill. They may be "due on receipt", but they state a date that late charges begin. Adding a late payment when the next bills go out is simply an arbitrary act. Not enforcable.
     
    Last edited: Dec 15, 2004
  8. cja1987

    cja1987 PlowSite.com Addict
    Messages: 1,407

    LOL, i have to admit that i have done that to the cars parked in the driveway of someone who did not pay after repeated requests. The guy was not nice at all to begin with, i should have told him to find another person to plow his drive the first time i met him, he was that rude. He probley does it to everyone who does anything for him, some people are just morons. He used every trick in the book to avoid paying, pretend he was not home, etc., etc. So next storm, and it was a nice big one, I BURIED his cars. I have not heard from him since nor have i seen or care about the $200 he owes me. I got him back, he got the message, he saw me do it. He called the cops (of course) and played stupid with them and said that i had never done any work for him. It would have worked if I did not know almost every cop in town.

    Now that i told you a useless story, that was the only "real" problem i have ever had with someone not paying. Other people have "innocently" forgot and felt bad and paid right away upon questioning. I just send them a very friendly note asking for payment and I get it. I know its a HUGE deal to us that we make money, but not everyone is thinking about paying the plowguy as much as we are. Sometimes they just need to be reminded and tell them to please be prompt in the future. Personally unless it was ALOT of money, i would not waste time sueing people. Find something else to do, talk to them, find out WHY they are not paying, if they are "approachable" then just talk to them diplomatically and unless you really screwed up something (that you were not aware of) they have NO justification for not paying you. If they think they can get away with it and thats what their goal is, they are loosers! I have my ways of dealing with loosers before they cost me alot of money.
     
  9. PLOWMAN45

    PLOWMAN45 2000 Club Member
    Messages: 2,831

    i have done the burying of the snow before 1 time sent a 10 yrd dump truck to dump lots of snow in the driveway this 350 i was owed
     
  10. dlcs

    dlcs 2000 Club Member
    Messages: 2,149


    The above quote is not something I would recomend for anyone to do. First off, I wouldn't do something like that for fear of damaging my reputation. I bet that guy told his neighbors, friends and relatives what you did, even though he probably didn't tell them he scammed you out of money. there are better ways of dealing with those kinds of indiviuals like small claims court. But God knows that i have wanted to do something like that a time or two. just not very professional.


    All my bills that I send out have terms as net 15 days. Most of my customers pay within the limit but occasionally I get some that stretch it, not that big a deal. When it becomes a month I resend the bill and give them a week. If that doesn't work then its a phone call or visit. Last resort I threaten small claims court and that works every time, atleast so far. We all know people have money troubles now and then. I'd don't want to loose a customer over a late payment but sometimes that happens.
     
    Last edited: Dec 15, 2004
  11. cja1987

    cja1987 PlowSite.com Addict
    Messages: 1,407

    I agree with you 100% :nod:
    Thats why i said it was a useless story, i don't think anyone here would recommend others to do it. I should have added a disclaimer saying that i did not recommend it to begin with. Personally I had had it up to my nose with this guy and his attitude. He pi$$ed me off enough so i decided to inconveinence him and the easy way to do that was bury the guy. He ended up shoveling some of it then paying some guy with a bobcat alot of money to remove the 10' piles that i had put behind his cars. I got all the snow I could harvest for this one. As far as reputation goes, yes he can talk to anyone he wants and i know he will never recommend me to anyone, just like I will tell every plower I know to watch out for him, he loves to scam people, thats how he makes money. I plow 3 of his neighbors, they all like me. I don't completely depend on plowing and my business reputation as iam 17 and have no plans to make a carrear out of it at the moment. I plow 37 drives and want to keep it that way, I don't need more business and don't want it. I do it for a little money but mostly i enjoy it. I still do it legitimately though with the proper insurence and following proper procedure for money earned and expenses. I don't need a guy like him, he had cost me some money and aggravation so i did it back to him. Does that make it the right thing to do? Absolutely not! It just happened to be my way of dealing with him and in my mind he has paid for not paying me, he won't do it to me again and hopefully he won't try it with any other person who plows his driveway.
     
  12. SteveR

    SteveR Senior Member
    Messages: 252

    My only trouble has been with people that can afford to pay A lawyer and a pair of gay dudes with a 500k camp on a lake. I just quit plowing and Im thinking about taking them to small claims court mostly to bring the lawyer before the same judge that she works in front of. My Motto plow for the poor even if they have trouble and are slow they always pay..
     
  13. PLOWMAN45

    PLOWMAN45 2000 Club Member
    Messages: 2,831

    if i can get your money back can i have a % of the cash
     
  14. drplow

    drplow Senior Member
    Messages: 174

    deadbeats

    first of all if you have been plowing for several years you should allready know to get most of the money up front and never let the customers bill get too high. 500 bucks sucks to loose, but 100 will be alot easier to recoup from or collect in the future. when some one is late the first thing i do is send another bill. then i call them and see whats up. most of the time people this time of the year are living paycheck to paycheck. so i set a date when payment will be made with them and that we both agree upon and that is that. now for the dead beats, i pay a visit the day after they get paid or during a snow storm, or call them very late or early. it seems that i always get paid sooner or later. also, next season i drop the deadbeats or raise their bill alot. :gunsfiring:
     
  15. NJ Plowman

    NJ Plowman Senior Member
    Messages: 799

    DEADBEATS...KILL'em ALL ! :gunsfiring:
     
  16. PLOWMAN45

    PLOWMAN45 2000 Club Member
    Messages: 2,831

    Metallica kill em all :drinkup: :gunsfiring:
     
  17. MIAWPUKEK

    MIAWPUKEK Senior Member
    Messages: 267

    Non-payers (what I do)

    I have the same problem of non-payers but not that exteme. Just around 10-20 dollars. If they don't pay, they don't get it done again.....and it's not my fault if a little snow gets piled in their driveway when I'm plowing in the area. :nono:
     
  18. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 8,571

    I only bill once a month just like the garbageman and the utilities, they don't send you a bill every time you turn on the lights or get a glass of water.. the only ones that are slow to pay are the commercial ones that have a management company taking care of there maintaice.
    first, resend the bill,
    second, send a bill past due (never call, there is no record to show in court)
    third, I stop plowing them ( you then will get a call asking, why arn't you plowing us?)
    third if you still don't get paid take'em to court ( just make sure to document every thing!!!)
     
  19. glenspot

    glenspot Senior Member
    Messages: 255

    Lets say they owe me $200. When they didn't pay on time they breached the contract. Which means, I'm under no obligation to uphold MY end of the contract. I could drop them.

    BUT...I really want that $200, and I really want the money I planned on getting for the whole season.

    So, if I stop plowing...they call up snow plow guy #2. He plows in January and February...they don't pay him either. He stops. Then they call snowplow guy #3. He plows in March and whatever we get in April. They don't pay him either. Now its spring, and they made it through the winter without ever paying for snow removal. They owe all of us money....but for $200 are we going to go to court, or say "lesson learned"... The possibility exists that if we go to court THEY could win. They could say "service wasn't good", or "we were going to send payment, then plowing stopped. So we went with plow guy #2"....whatever they came up with to fight it.

    Scenario #2: I continue to plow all winter... Holding up my end of the contract. I keep adding late fees, and charging their account for every plow. I bill them every month. And come spring they owe me a wagon load full of money. THEN i sue them. Proving that I held up my end of the bargain, ALL YEAR that they never called to complain or say service wasn't what they expected.. Plus, then we're dealing with an amount of money worth fighting over.
     
  20. Dwan

    Dwan Senior Member
    Messages: 879

    First of all a late fee is not interest it is a late fee just like the IRS you can charge both. I have a late fee, billing fee, and interest. I also charge enough to offer a discount if they pay within 10 days of billing.
    So here is what I do. I send a bill due in 30 days and offer a discount of 20% if they pay in 10 days of the date on the bill. then at 30 days there bill is due if it has not been paid I add a late fee of $50.00 and interest @ 1.5% per month (18% yearly) Then I add another $20 for a statement fee. Trust me you will hear from them real fast. Now I can wave any or all of it if I like what they say of loose a customer if I don't. They will never be late again. I have been stiffed 1 time in 22 years and that person I took to small clams court and got a judgment for $3200 when it was all done. there bill started out @ a little over $800.
    If you do have a dead beat be sure to send them a W-2 at the end of the year so they have to pay tax on what they received without paying for. By the way there is nothing wrong with making a mistake on that W-2 by adding a couple extra 0's